Log in/Register

Please log in or register to continue. Registration is free and requires only your email address.

Log in

Register

Emailrequired

PasswordrequiredRemember me?

Please enter your email address and click on the reset-password button. You'll receive an email shortly with a link to create a new password. If you have trouble finding this email, please check your spam folder.

To continue reading, please log in or enter your email address.

To access our archive, please log in or register now and read two articles from our archive every month for free. For unlimited access to our archive, as well as to the unrivaled analysis of PS On Point, subscribe now.

I take it that the costs of climate change are reckoned in crop losses due to more extreme weather, damage to infrastructure due to more intense storms, the need for additional electricity generation capacity (to supply additional air conditioners during more frequent heat waves) and other new infrastructure (to shield against rising sea level), loss of coastal mangrove swamps and other wetlands (to rising sea levels) where commercially valuable fish spawn, and perhaps other costs that I can't think of now. Correct me if I have mentioned some costs that were left out of the calculation.

How is the cost of lost polar bear habitat calculated? Or is it? How is the cost of lost species calculated? Some species can migrate northward as temperatures rise. But we have largely foreclosed that possibility with our paved and fenced world now. Mountain-dwelling plants can migrate up-slope to some degree as temperatures increase, but this possibility exists only so long as there is an up-slope to go toward. Those plants already adapted to living near the tops of mountains may have nowhere to go to. And this is a slow process. Plants already at risk due to loss of pollinating insects may not be able to withstand this additional challenge to their survival. How is the loss of biodiversity calculated as a cost of climate change? Or is it?

If biodiversity is not a value that is reflected in the calculations, then the numbers presented are at best misleading. If diversity of life is reflected as a value in the calculus, then it is certainly a factor that it would seem to be hard to fix with precision. Those who say that we should not base our policy on economists' bean counting have a point. We cannot put a price on the value of a diverse and resilient ecosystem any more than we can easily put a monetary measure on the value of a breath of fresh air or a beautiful sunset.

The question for a democratic society is, "What amount of carbon dioxide should we allow to be released into the air each year (and what amount of methane, and what amount of various other materials)?" If we notice that most people want significant reductions in carbon emissions (because we decide to take a random survey and ask the question), and if we know that actual emissions are far in excess of what most people feel is acceptable, then we can ask, what is the cost of sacrificing our democratic principles on the altar of economic growth?

The truth is that a path forward that assumes perpetual economic growth is a road to oblivion. The cosmos cannot support the growth projections that are offered as the basis for comparison in this analysis. We *can* create a society that grows in productive capacity when people learn new ways of making wealth *without* growing in its tendency to squander natural wealth and foreclose future opportunities for those not yet born. I believe that to do so, we will need to recognize a shared ownership in the natural wealth of the planet. We will need to impose the fee or tax (or adopt a system that provides for sale of a limited number of permits at auction) and make the price of various kinds of environmental impacts (emissions and extractions) high enough so that the overall impacts of the various kinds do not exceed what most people feel is acceptable. The fee proceeds should go to all the people, to each an equal amount (or according to a sliding scale, based on income and endorsed by the people at large, to be determined by random survey).

I agree with Dr. Lomborg that we should end policies that subsidize inefficient industries. The market can work out the best path forward *when all costs are properly accounted for*. (This article unfortunately omits any direct discussion of external costs.) As fossil fuel (and manufacturing based on extraction of virgin raw materials) becomes more expensive, market forces will favor investment in alternative forms of energy (and manufacturing based on recycled materials) AND they will favor increased efficiency AND changes in lifestyle choices, all of which would contribute to the stability and sustainability of civilization. Appropriate fees, with sharing of fee proceeds, would mean a sustainable and more just society. Political pressure to promote economic growth would abate, since downturns in economic activity would not bring with them extreme economic hardship and strong perceptions of economic injustice, because every person would retain their share of natural wealth as a cushion against any hard bumps in their road.

The striking thing that I see is where we spend the money. I was a nuclear operator and fixing a problem by politics is not fixing the problem at all. The question should be how many scientists can we invest in? We don't invest in science. Windmills aren't science. They are engineering problems at best. We can calculate the exact energy that passes by one, wind speed, air density and bam that is the limit. Why not spend money on nuclear fusion research and nuclear power research? I haven't got the numbers but I think we have paid more in the past ten years for windmills than all the money we ever spent on nuclear research starting in the 40's. How does that make sense?

One problem with investing in R&D: such investments never work. Indeed, I can think of no example where targeted R&D investments--such as those proposed here for innovations in green energy--have worked to hit the target.

I hate to say it, but I think the market will provide the best incentive here. Companies are already scrambling to produce better (in other words, more green) energy at cheaper prices. Better to let the market work than to distort it and waste precious tax money on enriching rent seekers and doing little or nothing for the public good.

Dear Mr. Lomborg,
There are so many mistakes in this article, it is difficult to know where to begin!
As usual you make the mistake of assuming that bean counting (a cost-benefit analysis) is a good way to arrive at public policy. This was thoroughly debunked in the 1970s (c.f. E.F.Shumacher, "Small is Beautiful"). Economics gives the wrong answer, manifestly, time after time.
What about this specific point? Here, you are ignoring the fact that the targeted reduction in E.U. emissions will establish a baseline for future reductions, both within the E.U. and elsewhere. Indeed, the E.U.'s relations with nations that are receiving the brunt of initial global warming effects could be severely, negatively impacted if they are not seen as "doing their part".
To make this point clearer, consider my own personal contribution to atmospheric carbon. If I were to reduce this to zero, the net effect on climate would be minute, but the cost to me would be immense. And, most of the benefits of that increment would accrue to others. From an economic standpoint, this is a strong argument for me to do nothing to reduce my carbon emissions -- manifestly the wrong decision. Why is this the wrong decision? Because, if everyone follows this same logic, then there will be no reduction at all, and climate change will continue unabated. Instead, we MUST abandon this destructive focus on economic arguments, and realize that we are in a life-boat together, and that our survival depends on everyone doing what they can, however small.
If you insist on taking an economic approach to this problem and similar problems, then I recommend looking at the work of Elinor Ostrom, the Nobel laureate in Economics for 2009. She received the prize for her work on governance, particularly of the commons. The commons at issue here is this climate-lifeboat-planet that we all inhabit.

Dear Matt. Thanks for your comments. You are right, we should not make the decision on *private* costs vs *private* benefits (since cutting CO2 cost would be significant, and the benefits trivial.
But this is not the argument I'm making. I compare the *private* cost for the EU with the benefit for the *entire* world. So I am making the best-case comparison for climate action.